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Investors unmoved by Downer EDI Limited and Spotless Group Holdings Ltd refinancing

Shares in transport services company Downer EDI Limited (ASX: DOW) and laundry and linen provider Spotless Group Holdings Ltd (ASX: SPO) were largely unaffected today after a joint announcement the two companies had completed a combined $1.3 billion refinancing – Downer owns 87.8% of Spotless.

The refinancing comprises of a $400 million syndicated debt facility for Downer and a $900 million syndicated debt facility for Spotless after syndication of the debt facilities was announced in March and received strong support from domestic and international financiers.

Downer CFO Michael Ferguson said the refinancing achieved its key objectives of “extending the maturity profile of the Group’s borrowings – adding to the diversity of the Group’s lenders and providing an overall reduction in borrowing costs.”

But investors were unmoved by the announcement, with Downer shares down marginally to $7.35 at the time of writing and Spotless shares steady at $1.10.

The facilities were arranged by a consortium of financial institutions including Australia and New Zealand Banking Group (ASX: ANZ) whose shares were up 0.2% to $27.82 at the time of writing and big four peer Commonwealth Bank of Australia (ASX: CBA) – also on the gain today – up 0.75 to $71.45.

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Motley Fool contributor Carin Pickworth owns shares of Australia & New Zealand Banking Group Limited and Commonwealth Bank of Australia. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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